If you work as a pharmacist, you could enjoy a host of great features and discounts to help you save money on your home loan
Before a lender decides whether or not to lend money to you, they’ll assess your risk and ability to make repayments on time. If you work as a pharmacist, many lenders often classify your profession as one popular with many low-risk borrowers.
With this in mind, some lenders offer loans that are specially designed for pharmacists. These loans include features such as better interest rates, the ability to borrow a larger percentage of the property’s purchase price, and even the freedom to avoid making Lenders’ Mortgage Insurance (LMI) payments.
How do home loans for pharmacists work?
It’s a well-known fact that lenders view doctors as low-risk borrowers, but many people are not aware that some lenders also classify pharmacists in the same category. As a result, these financial institutions are willing to offer a host of more attractive borrowing features to pharmacists looking to buy a home, buy an investment property, refinance or even perform renovations.
Depending on the lender, home loans for pharmacists may offer discounted interest rates and the ability to avoid LMI repayments. For example, with a normal home loan you will typically need to take out lenders’ mortgage insurance if you plan to borrow more than 80 per cent of the value of the property you are purchasing. However, some home loans for pharmacists will waive the requirement for you to pay this insurance.
Brian Borrows Big
Brian is a pharmacist who earns an annual salary of $90,000. He plans to buy an apartment for $750,000 with a deposit of $40,000 which means he will need to borrow more than 80% of the purchase price of the property. He approaches his regular bank for a loan, but is put off by the fact that they will require him to take out expensive lenders’ mortgage insurance.
Looking for a cheaper alternative, Brian contacts a lender that offers specialist home loans for pharmacists. Not only does this lender offer him a better interest rate than his bank, it also waives the need for him to take out insurance, allowing him to save almost $35,000 in LMI charges.
How to compare home loans for pharmacists
- Interest rates. Rates are an important feature on any home loan, so look for a loan that offers a competitive fixed or variable rate. If a discounted rate applies, make sure you check whether this only applies for an introductory period or for the life of the loan.
- Fees. Make sure you’re aware of all the fees that may apply to your loan, from application and establishment fees through to early repayment fees.
- Repayment options. Can you make extra repayments whenever you wish? Can you pay the loan off early without incurring a penalty? Can you choose a repayment schedule that suits your budget? Consider these factors when shopping around for a loan.
- Maximum loan to value ratio (LVR). Some home loans for pharmacists will allow you to borrow a higher percentage of the price of the property you are buying than regular loans.
- Lenders’ mortgage insurance. You may wish to look for a lender who is willing to waive the need for you to take out this type of cover in order to approve your loan.
Pros and cons of home loans for pharmacists
- Avoid lenders’ mortgage insurance. Home loans for pharmacists allow you to enjoy a significant saving by removing the need to take out LMI cover.
- Borrow more. Many of these loans come with a higher LVR than traditional loans.
- Better interest rates. Many home loans for pharmacists offer discounts off the standard interest rate.
- Not well known. Many pharmacists are unaware of the fact that they are able to take advantage of the savings and features offered by specialist home loans.
Frequently asked questions about home loans for pharmacists
What home loan discounts are available to pharmacists?
You can take advantage of discounted interest rates, higher LVRs and the freedom of waived lenders’ mortgage insurance payments.
What criteria do I have to meet to be eligible for one of these home loans?
Apart from the obvious requirement that you be employed as a pharmacist, other lenders will need you to satisfy their own specific criteria before they will offer you a loan. These may include requirements concerning the maximum LVR, the maximum amount you can borrow and your annual income.
You’ll generally need to satisfy certain criteria in order to be eligible for the LMI to be waived, such as income requirements (normally you need to earn $150,000 + but this may vary from lender to lender), joining your professional association (e.g. the Australian Pharmacy Council) and also going through a mortgage broker.
Which lenders offer the discount?
If you satisfy the criteria, then some of the Big Four and specialist lenders may waive LMI for eligible professionals. However, it’s recommended that you enlist the services of a broker and shop around because only about 5% of brokers have access to these specialist lenders.
Where can I find more information about home loans?
finder.com.au offers a wealth of information about Australian lenders and the myriad home loans they offer. If you need more information about any aspect of the borrowing process, here is a great place to start your quest for knowledge.